North East Business and Enterprise Support

Transcription

Mapping of Business and Enterprise Support in the North East LEP Region
Final Summary Paper, September 2014
NORTH EAST LOCAL ENTERPRISE PARTNERSHIP
MAPPING OF BUSINESS AND ENTERPRISE SUPPORT IN THE NORTH
EAST LEP REGION
FINAL SUMMARY PAPER
Prepared for: Dinah Jackson and Lee Cranston, North East LEP
Prepared by: Leigh Sear, SFEDI
Date:
September 2014
Version:
4
SFEDI (2014) – Mapping of business and enterprise support in the North East Region
Page 1
1.
Introduction
1.1
In June 2014, the Small Firms Enterprise Development Initiative (SFEDI) was
commissioned by the North East Local Enterprise Partnership (North East
LEP) to undertake a mapping of the business and enterprise support in the
North East region.
1.2
As a result of a number of recent changes and developments at a regional and
national level, the North East identified a need to develop an understanding of
the extent and nature of business and enterprise support services1 across the
LEP region. A mapping of provision would provide valuable intelligence and
insights around:
 The coverage of business and enterprise support across different
groupings or segments of the business and enterprise community in the
North East region;
 Key areas of duplication and any gaps in provision, particularly in terms of
key strategic priorities;
 Levels of performance and/or effectiveness of provision, to assist in
identifying examples of effective practice.
1.3
As such, the mapping could be used to inform:
 Current strategic considerations and discussions around the future
business and enterprise support landscape;
 Decisions around the take-up of regional options associated with national
initiatives (e.g. Growth Accelerator, Manufacturing Advisory Services) and
the commissioning framework for the next round of European funding
 Development of the recently announced Growth Hub in the North East
region;
 Engagement activities with businesses service professionals as
intermediaries in the provision of services.
1.4
This summary paper outlines the key issues to emerge from the mapping of
the business and enterprise support services in the North East region. The
aim of the paper is to identify the key issues around the extent and nature of
provision in the North East region, and the associated implications for future
developments, as opposed to providing a detailed analysis of the types of
services offered. These insights can be gleamed from the Directory of Support
Services developed as part of the project.
For the purposes of this mapping, business and enterprise support was defined as forms of external
assistance which can be used by a small and medium-sized enterprise excluding financial provision.
This focus reflects the depth of the existing information base related to financial provision within the
North East region which can be accessed through the North East Access to Finance (NEA2F) guide. In
part, the mapping provided an opportunity to extend the extent and depth of the ‘business support’
section of the current guide.
1
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2.
Aims and Objectives
2.1
The overall aim of the project was to undertake a review and mapping of the
current provision of business and enterprise support services across the
North East region.
2.2
Specific objectives included:
 Map and segment current provision available to businesses including
national, regional and local (i.e. provided at the local authority level)
schemes from the public, private and the ‘third’ sector;
 Identify boundaries to the accessibility, the appropriateness of current
provision and any limitations with respect to the time limited nature of
specific business support services;
 Collate and make sense of the outcomes from the mapping
 Organise the outcomes from the mapping in accordance with guidance
from the LEP;
 Work with the LEP to present the outcomes from the mapping in a clear
and intuitive way, to support use by a range of stakeholders on the
demand and supply-side.
3.
Approach
3.1
Our approach to undertaking the mapping exercise has been based on using a
combination of quantitative and qualitative methods of investigation.
Quantitative methods have been used to identify issues around the extent and
coverage of business and enterprise support services, such as the type of
support provided, type of provider, scale of delivery and type of businesses
targeted. This has been complemented by the use of qualitative methods to
identify the depth and effectiveness of current programmes of support (e.g.
levels of use, gaps in current provision).
3.2
There have been three key stages to the mapping of business and enterprise
support.
3.3
3.4
Stage 1 - Desk-based review of support services
The mapping commenced with a desk-based review of the NEA2F guide,
organisational websites, support directories and service guides, promotional
material and service literature, business magazines and previous mapping
and audits.
This identified 91 organisations from the private, public and not-for-profit
sectors which potentially offered some form of business and enterprise
support in the North East region.
Page 3
3.5
3.6
3.7
3.8
Stage 2 - Consultations with providers of business and enterprise
support services
A total of 20 face-to-face and telephone consultations have been undertaken
to date with providers of business and enterprise support services. A list of
organisations consulted as part of the mapping is included in Appendix 1.
The consultations have focused on the following issues:
 Extent of provision offered by the organization;
 Key characteristics of the services provided (e.g. scale of delivery, type of
offer (advice, consultancy, coaching, finance, information, networking,
mentoring, premises, training), degree of segmentation);
 Nature of funding and associated restrictions;
 Perceptions on key overlaps and gaps in the current landscape;
 The effectiveness of provision within the region and key areas for future
development.
Stage 3 - Sensemaking and reporting
This involved collating and reviewing the material collected through the deskbased review of provision and the consultations. This assisted in reviewing
the services provided by the 91 organisations identified through the initial
review. This review process created a listing of 81 organisations who
provided at least one form of business and enterprise support to SMEs within
the North East region. Upon closer inspection, a number of organisations on
the original listing either provided services that were not accessible by SMEs
within the North East region and/or were advertising services which had
been discontinued (e.g. through lack of funding or changing priorities). These
organisations were removed from the listing.
Other activities undertaken to make sense of the identified services included:
 Development of a business support mapping template to assist in
presenting the outcomes from the mapping exercise in a format which
could be used by both the demand and supply-side;
 Completion of a mapping template for specific services from the mapping
exercise;
 Development of a business support directory. The directory provides a
listing of: name of organisation; organisational status/type; number of
services provided; scale of delivery; name of service; type of support
offering; type of business targeted by stage of business development;
 Identification of existing business support service evaluations.
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4.
Key Headlines and Highlights: An Assessment
4.1
The mapping has identified 81 organisations providing a total of 335 services.
Therefore, at a local and regional level, this business and enterprise support
landscape is somewhat complex involving a relatively large number of
providers, with a series of interdependencies and interconnected
relationships and networks.2
4.2
Extent and nature of the business and enterprise support landscape
Within this landscape, there are seven types of organisation providing
business and enterprise support:
 Government bodies and agencies such as the Department of Business,
Innovation and Skills, Department of Energy and Climate Change and
HMRC. This structure of provision is not fixed, as changes over the last 18
months have highlighted, which has created a number of ambiguities in
the landscape at a local and regional level. For example, the recent
announcement of funding for the development of Growth Hubs by BIS will
influence the nature of provision at a regional level;
 National schemes provided at a regional level, such as the Growth
Accelerator and Manufacturing Advisory Service, who primarily provide
services targeted to businesses with growth potential;
 Local enterprise development organisations who primarily provide ‘soft’
forms of business support (e.g. coaching, mentoring) to specific groups of
individuals and businesses at the early stages of business development
(e.g. pre-start and start-up). Within the North East region, the key
providers within this grouping are the local enterprise agencies;
 Local authorities who tend to focus on providing ‘hard’ forms of business
support (e.g. information, finance, premises) to a range of different types
of business;
 Business and enterprise associations, networks and institutes which are
business or sector-led and provide access to information and
opportunities for businesses to network and learn from each other;
 Private sector providers supporting different aspects of developing and
managing a business such as finance, marketing and sales and people
development;
 Broad range of other providers, such as FE colleges, universities and
managed workspace providers, who are involved at a local, regional and
national level and offer a range of different services including both hard
and soft forms of provision.
Comparisons of the business support landscape in the North East with other regions are somewhat
difficult given differences in institutional and governance structures and the business community.
However, a mapping of business and enterprise support in the Liverpool City Region LEP area,
undertaken by SFEDI, identified 74 organisations providing 310 services. However, this mapping
included an extensive mapping of financial assistance for SMEs which was not mapped in the North
East region.
2
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4.3
There are a number of key features associated with these organisations and
their provision for SMEs in the North East region. In terms of organisational
‘status’, Table 1 highlights nearly two-thirds of the organisations are not for
profit organisations. In comparison, 23 per cent are private sector
organisations and 17 per cent are public sector organisations. The majority of
the not for profit organisations within the North East are local enterprise
development organisations and business and enterprise associations,
networks and institutes.
Table 1: Organisational characteristics
Frequency
Organisational status:
Private
Public
Not for profit
Scale of delivery:
Local/sub-regional
Regional
National
Total no. of organisations
4.4
19 (23%)
14 (17%)
48 (60%)
24 (30%)
48 (59%)
19 (18%)
81 (100%)
Nearly 50 per cent of organisations provide four or less services to SMEs in
the North East region with an average of 4.13 services per organisation (see
Table 2). However, this average masks a large diversity in the number of
services provided by each organisation. On the one hand, there are a number
of organisations providing only service or programme, whilst on the other
hand, there are organisations providing between 8 and 10 services to
businesses in the North East region. There are no marked patterns in the
number of services provided by different types of business support
organisation, although local authorities and business and enterprise
associations, networks and institutes are more likely to offer a larger number
of services.
Table 2: Service provision – Number of services
Number of services
1
2
3
4
5
6
7
8
9
10 and over
Frequency
14 (17%)
10 (12%)
5 (6%)
15 (19%)
13 (16%)
13 (16%)
6 (7%)
3 (4%)
0 (0%)
2 (2%)
81 (100%)
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4.5
In terms of scale of delivery, the mapping identified that there is a focus on
regional provision with 59 per cent of organisations offering some form of
service at a regional level. In comparison, 29 per cent of organisations offer
some form of service at a local/sub-regional level (see Table 1). There are a
number of organisations, such as local enterprise development organisations,
which offer services at both a sub-regional and regional level. In comparison,
services from private sector providers tend to be offered at a regional level. In
addition, there are a number of differences in the type of services provided at
a local, regional and national level. For example, there is a greater focus on
‘soft’ forms of provision (e.g. advice, coaching, mentoring) at a local/subregional level. In comparison, ‘hard’ forms of provision, such as finance and
information, are provided by organisations at a regional and national level.
4.6
There is an emphasis on advice, information and networking provision within
the North East region (see Table 3). The mapping identified that 74 per cent
of organisations provide some form of business advice, whilst 66 per cent and
61 per cent provide some form of information and networking provision
respectively. In comparison, 27 per cent provide access to business premises
and 18 per cent offer coaching services to SMEs.
Table 3: Service provision – Type of services
Type of service
Advice
Coaching
Consultancy
Finance
Information
Mentoring
Networking
Premises
Training
Other
Frequency
60 (74%)
15 (18%)
32 (39%)
43 (53%)
54 (67%)
26 (32%)
50 (62%)
22 (27%)
48 (59%)
23 (28%)
81 (100%)
4.7
There are a number of distinct patterns in the type of service provided across
the North East region, by scale of delivery and type of stage of business
development targeted by provision.
4.8
In terms of the type of service provided at different scales of delivery, Figure 1
highlights that the key services provided at a regional level are coaching,
mentoring, networking and other forms of provision (e.g. supply of
apprentices and graduates). In comparison, there is a tendency for advice,
financial assistance and information to be provided at a sub-regional level.
This configuration will not only reflect how the business support landscape
has evolved at a local level over the last 10 to 15 years (e.g. the legacy of
initiatives such as the Local Enterprise Growth Initiative) but also current
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regional priorities and interpretations of regional and national policy scripts
and strategies within the North East region.
4.9
Given what we know about the uptake of different business support services
by small businesses, this configuration of support does raise a number of
questions around the value of providing information at a local level and
networking at a regional level. These issues are discussed further below.
4.10
At a sub-regional level, the mapping identified that the majority of provision
within County Durham was advice, financial assistance and training. This
reflected the number of local enterprise development agencies across the
County and their focus on working with start-ups as opposed to other groups
of businesses. A similar pattern of provision was evident within
Northumberland. Across Tyne and Wear, the mapping identified an emphasis
on advice, information and financial assistance. In part, this reflected the
wider range of business support organisations operating in Tyne and Wear,
and as a result, the different groups of businesses that these organisations are
working with.
Figure 1: Geography of service provision
80
70
60
%
50
County Durham
40
Northumberland
30
Tyne and Wear
Regional
20
National
10
he
r
Ot
ai
ni
ng
Tr
ise
s
Pr
em
in
g
or
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g
rin
Ne
tw
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to
M
at
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nc
e
fo
rm
In
Fi
na
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nc
y
in
g
Co
ns
ul
Co
ac
h
Ad
vi
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0
Type of service
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4.11
In terms of type of SME, Figure 2 highlights that:
 Advice, information and networking provision are primarily provided to
all types of SMEs, i.e. it tends not to be tailored to the needs of different
groups of SME;
 Consultancy and financial provision is primarily provided to those
businesses with growth potential;
 A combination of coaching, mentoring and financial provision is commonly
provided to individuals wishing to start a business and newly established
businesses. This combination enables start-up businesses to learn from
other with appropriate experience and make effective use of investment;
 Business training in the North East region is targeted towards individuals
wishing to start their own business and newly established businesses. As
a result, the training is focused on developing the skills required to make
the transition from developing a viable business idea to action;
 In comparison, there is a relative lack of provision around developing
enterprising skills and business development skills;
 There is also a relative lack of support which assists businesses in
managing the transition from start-up to growth.
4.12
Therefore, there are clear variations in provision by stage of development.
Start-ups are primarily supported through a combination of advice, finance
and training. Ongoing business development is supported through advice and
training. Businesses with growth-potential are supported through advice,
consultancy and financial provision.3 In comparison, the majority of small
businesses across the North East region have access to information and
business premises.
For the purposes of the mapping, high growth was defined as ‘Starting with at least 10 employees
and annual average growth of at least of 20 per cent in employment or turnover over a three year
period’ (BIS, 2013).
3
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Figure 2: Service provision by stage of business development
70
60
50
40
%
Start-up
Ongoing development
30
Growth
20
High-growth
All
10
he
r
Ot
In
fo
rm
at
io
n
M
en
to
rin
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Ne
tw
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Pr
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Tr
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g
Fi
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nc
e
nc
y
ta
su
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hi
ng
Co
n
Co
ac
Ad
vi
ce
0
Type of service
4.13
The mapping highlights two approaches to targeting or segmenting of
provision to meet the needs of specific groupings of businesses. On the one
hand, a number of organisations do not segment provision in that they
provide services to all types of SME across the North East region. One
organisation in two offers support services to all SMEs. On the other hand, if
organisations do target specific groups of owner-manager and/or business,
two key approaches emerged from the mapping: by stage of development and
by nature of business activity/sector.
4.14
In terms of the former, there is a clear focus on supporting business start-ups
in specific localities in the North East region (e.g. areas with different forms of
multiple deprivation) and businesses with growth-potential. This not only
reflects priorities at a national level but also the previous enterprise support
landscape in the North East region, with the legacy from initiatives such as the
Local Enterprise Growth Initiative and High Growth Coaching.
4.15
In terms of the latter, there is a clear focus in provision on supporting
businesses within specific sectors including advanced/high value added
manufacturing, low carbon, life sciences, digital and creative and knowledge
intensive business services. The consultations have identified that this
reflects both the work of organisations, such as the LEP, and the funding
priorities of organisations including the European Commission which have
been used to develop ‘attractors’ and networks around certain areas of
Page 10
business activity. In turn, these sectors are then embedded in future
provision as a way of demonstrating evidence of being business/demand-led.
4.16
Local enterprise development organisations and other providers primarily
target start-up businesses, whilst regional agencies, private sector providers
and ‘other’ providers work with businesses with growth-potential businesses.
Services targeted at businesses with growth potential are primarily targeted
at businesses in specific sectors such as digital and creative and high value
added manufacturing.
4.17
In addition, there are a number of organisations who provide a range of
services targeted at businesses at different stages of development. For
example, a number of the local authorities offer services which can be
accessed by start-ups, businesses looking to make the transition from start-up
into the early stages of business development, businesses looking to
consolidate and survive and growth businesses. As discussed below, this
patterning of the landscape in terms of segmentation raises a number of
complexities and inconsistencies (see 4.22 below).
Table 4: Service provision – Type of market segmentation
Type of service
Start-up
Ongoing business development
Growth potential
High growth
All businesses
4.18
4.19
4.20
Frequency
35 (43%)
25 (31%)
36 (44%)
10 (12%)
42 (52%)
81 (100%)
In comparison, there is less targeting by type of owner-manager. The
mapping identified provision targeted towards: young people; older people
(over 50) and the unemployed. However, this type of targeting was
somewhat limited in comparison to provision targeted by stage of
development and nature of business activity and tended to be associated with
provision from organisations with a regional and national focus (e.g. young
people – Princes Trust; older people – PRIME; unemployed – New Enterprise
Allowance Scheme).
Key issues and reflections
The current business and enterprise support landscape in the North East
region raises a number of issues in terms of addressing gaps and overlaps and
identifying ways of enhancing the current effectiveness of provision.
First, the analysis of the type of owner-managers and businesses targeted by
the range of business and enterprise support services highlights a key focus
on supporting start-ups and growth-orientated business. This is a
reflection of priorities at a national and regional level, where there is an
emphasis on: (i) working with individuals to support the transition from
Page 11
unemployment to self-employment and (ii) working with existing businesses
in key sectors to assist them in exploiting opportunities for growth (e.g.
through developing new products and/or developing new markets).
4.21
Whilst such a focus can be rationalised in terms of strategic value added for
public investment (Department of Business Innovation and Skills, 2014), it
does create a gap in provision related to supporting businesses in making the
transition from start-up to the initial stages of development and enhancing
the resilience of the existing businesses, so that businesses are able to
prepare, respond and recover to unexpected events in internal or external
operating environments (Lindley et al., 2011). This is particularly important
in regions such as the North East where there is evidence of structural
weaknesses within the business base, particularly in terms of the extent of
relationships and networks out with of the region (Tully et al., 2005;
Anyadike-Danes et al., 2013).
4.22
Evidence from the consultations and outcomes from other mapping exercises
suggests that this gap in supporting businesses with managing the transition
is evident within other regions in England.
 Reflection 1:
The mapping suggests that there would be value from the development of
provision which assists businesses in: (i) managing the transition from start-up
to growth and (ii) developing an understanding of business resilience and/or
embedding resilience plans in the development of the business. The key outcome
from such provision would be enhancing the sustainability of early stage
businesses as well as building the number of businesses who would be prepared
for further development and growth (i.e. pipeline of demand for regional and
national provision focused on working with growth orientated businesses).
4.23
Second, the mapping has identified a lack of provision related to
enterprising learning and skills development in small businesses,
particularly training provision that integrates enterprise learning and skills
with development of the business. Whilst this may reflect both the constant
change within skills provision a national level and the separation of skills and
business support in policy and funding terms at a national level, it is a critical
gap to be addressed.4
4.24
This gap is somewhat surprising given what we know about enterprise
learning and skills development in small businesses; for example, there is
agreement that the development of the owner-manager leads to the
development of the business in small businesses (Gibb, 1997; Johnson and
Devins, 2008; SFEDI, 2011). In addition, through funding mechanisms such as
The development of these enterprising skills is distinct from management and leadership skills
where there is a focus on: allocating and monitoring the work of the team, giving feedback, briefing
teams, supporting team members, managing conflict, resolving problems, procuring supplies, and
managing and improving customer service (Centre for Excellence in Management and Leadership,
2002).
4
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the ESF/LEP Local Response Fund, there is an opportunity to develop both
accredited and non-accredited learning and skills development provision
which supports the development of the business through the development of
the owner-manager.
 Reflection 2:
There is a need for provision within the region which integrates support for
business and enterprise learning and skills development. This will play a key
role in ensuring that managers and leaders within the business have the abilities
and skills required to survive and thrive within a business environment
characterized by uncertainty and ambiguity.
4.25
Third, a lack of clarity and inconsistency in the types of provision
delivered at different geographical scales emerges from the mapping.
Previous research on the dynamics and structure of business support delivery
would suggest that such inconsistencies not only lead to inefficiencies in
delivery but also a blurring of boundaries between different programmes of
provision (Bennett, 2012). The consultations identified examples of such
inefficiencies and blurring of boundaries in the current landscape in the North
East region. For example, similar types of start-up service are provided at
both a sub-regional and regional level, as are business growth programmes.
4.26
There are a number of potential routes to bringing forward clarity in delivery
structures. One approach involves reflecting on the scale at which certain
activities should be delivered. Experiences from other developed market
economies, such as Australia, Canada and Scotland, suggest that there are
benefits from commissioning specific activities at specific levels of delivery.
For example:
 Enterprise awareness and education  at a national level
 Business growth programmes and cluster and sector development work 
at a regional level
 Start-up provision and early-stage business development activity  at a
sub-regional/local level.
4.27
This framework could be used to review the types of support required to
address meet the needs of individuals wishing to start a business and
different groups of existing business in the North East region and the level at
which support should be delivered. For example, given the dynamics of the
business community in the region, is there a need for business growth
programmes at a local/sub-regional level? In terms of start-up provision, is
there sufficient demand to support the current scale of start-up loan provision
at a sub-regional level and is there is a need regional enterprise awareness
programme to support activities at a national level targeted at increasing the
number of people considering starting a business as a way of engaging with
the labour market?
4.28
In so doing, this approach assist in identifying where publicly-funded
provision can add value to services provided by the private sector,
Page 13
particularly in terms of addressing market failures. For example, whilst there
may be a case for publicly-funded provision at a sub-regional level to support
unemployed people in managing the transition to self-employment, there may
be a greater emphasis on facilitating the private sector to work with growthorientated businesses at a regional level, particularly given the evidence base
around the relationship between the specificity of need and the likelihood to
source support to address this need from a wider geography (Bennett, 2012).
4.29
These questions need to be explored further by reviewing the existing
evidence base (e.g. evaluations undertaken of current provision in the region)
and/or undertaking a focused piece of research which maps the outcomes
from this mapping onto the key needs and requirements at each stage of the
enterprise journey (see Appendix 2).
4.30
Alternatively, there is also an opportunity to consider the different roles
business support organisations play within the business and enterprise
support landscape in the North East region (Atherton and Lyon, 2001). A
starting point for this is to analyse both types of activities that can be
undertaken by support organisations and the focus of these activities. Using
this approach, a distinction can be made between providers of support and
enablers. Enablers represent organisations that help businesses to acquire
support, but that do not provide it themselves. In addition, a distinction can
be made between organisations focusing on market niches, i.e. specific
segments and aspects of SME development, and organisations that are
involved throughout the SME development process. Using this typology, four
general types of role can be identified: niche providers; niche enablers;
general providers; general enablers.
4.31
Figure 3 identifies the proportion of organisations providing these four
different roles. In general terms, the mapping identified that different roles
were performed by publicly-funded/not for profit and private sector
providers. Publicly-funded agencies tended to provide two roles – general
enabler and/or provider. In comparison, private sector organisations and the
professional community performed more niche-focused roles.
Page 14
Figure 3: Delivery roles of business and enterprise support organisations in the
North East region
Enablers
Providers
Niche
Private – 21.1%
Public – 14.3%
Not for profit – 16.6%
Private – 78.9%
Public – 42.6%
General
Private – 15.8%
Public – 28.6%
Private – 15.8%
Public - 78.6%
4.32
However, there is evidence that both public and private organisations
perform more than one role depending on the service being provided and the
nature of the client group. There are some inherent disadvantages in
combining roles such as niche provision and general enabling. The most
obvious is the potential for conflicts of interest arising when the management
function results in a choice between favourable provision by the
enabler/provider and referral to another provider. The consultations
identified a number of examples of this conflict particularly in terms of how
regional programmes interface with delivery at a sub-regional level. There
are, however, also advantages to this combined role. Existing process
enablers, for example, tend to be better integrated into the business
community than providers, largely because of the longer and closer
interactions demanded of the enabling role. As a result, these organisations
had a clearer and more substantial view of business needs and requirements,
as well as an understanding of the problems and opportunities encountered
by small businesses.
4.33
Therefore, the tendency to perform more than one role in supporting SME
development raises a number of issues in terms of whether enablers and
providers should be separated in order to reduce risks of conflicts of interest
and favoritism and under what conditions should there be organisations that
are both enablers and providers. There is an issue concerning how enablers
and providers interact and collaborate, if there is little or minimal integration
of these roles within single organisations.
 Reflection 3:
There is a need for greater clarity in the type of services provided at different
geographical levels, by scoping what can effectively be delivered at a subregional, regional and national level in the North East region. The development
of the commissioning framework for European funding and Growth Hub provide
an opportunity to undertake this scoping exercise.
Page 15
4.34
Fourth, there is a clear emphasis on working with businesses in certain
sectors, such as high value added manufacturing and digital and creative,
whilst provision for businesses in other sectors, such as business to consumer
services, is extremely limited. This reflects an interplay of three issues: (i)
current restrictions within funding mechanisms, such as ERDF, (ii) a focus on
job as opposed to wealth creation and (iii) a lack of understanding within
policy development of how business models are evolving to address emergent
needs and requirements (Bridge, 2010).
4.35
Not surprisingly, the consultations identified that the restrictions within
funding mechanisms such as ERDF are a major impediment to working with a
wider range of small businesses and introducing innovations within the
business and enterprise support offer, to meet the needs of different types of
business. In the short-term, it is difficult to see how such restrictions can be
challenged and shaped so that a more flexible business support offering can
be brought forward.
4.36
However there may be a role for the LEP in bringing forward proposals to
exploit opportunities within other national (e.g. Coastal Communities Fund)
and supra-national (Erasmus Plus, Creative Europe, ESF Local Responsiveness
Funding) funding streams, where there is more flexibility to work with
groupings of businesses not traditionally supported through more
mainstream funding mechanisms. This reinforces the issue outlined above in
4.22 about the need for greater clarity in type of services to be delivered at
different geographical scales.
 Reflection 4:
There is a need to explore how business support services can be offered to a
wider range of businesses, particularly those groupings of businesses underrepresented in the current landscape, through the development of the Growth
Hub and reviewing practices from other regions in the UK where this has been
achieved.
4.37
Fifth, there may be scope to provide small businesses with opportunities
to co-create business support services tailored to specific areas of business
development need, either in business groupings and/or with existing
providers of business support services.
4.38
Since the election of the Coalition government in 2010, a policy narrative
around demand-led and employer-ownership of skills development has been
translated into practice through initiatives such as Employer Ownership of
Skills and the Apprenticeship Trailblazers. These initiatives have provided
businesses with an opportunity to develop programmes of learning and skills
development which address specific areas of need within a sector or
geographical area. Such initiatives are attempting to shift from a supply-led
model, where training and learning providers are generating demand from
employers for provision that is developed by the provider, to a demand-led
Page 16
model where providers respond to the needs of employers (Howat and Ali,
2013)
4.39
Accordingly, there may be opportunities to engage small businesses with the
co-creation of business support offerings, through developments such as the
Growth Hub in the region. The development of the Growth Hub should
provide an opportunity to facilitate experience exchange and collaboration
between businesses to co-create specific programmes of business support, in
addition to signposting businesses to existing provision virtually or via some
mediated service (e.g. a telephone advice line).
4.40
This would provide the Growth Hub with a degree of distinctiveness and a
positioning within the current landscape as adding value to existing provision
and generating a market around business support. This issue of the fit of the
Growth Hub vis-à-vis existing provision was a key issue to emerge from the
consultations.
 Reflection 5:
In the development of the Growth Hub, there is an opportunity to proactively
engage with different groups of small businesses to identify demand-led
solutions to key business development needs and requirements and the ways in
which businesses can develop ownership of the development and delivery of
business support. This could be achieved through either a call for proposals
from groups of businesses for programmes of support that address current and
future needs and/or facilitating the development of bottom-up networks
between businesses which currently face challenges in accessing mainstream
business support.
4.41
Finally, there are a number of challenges to unpacking the effectiveness of
the current business and enterprise support landscape. Whilst the
mapping identified that a number of programmes have been evaluated, the
formality of these evaluations varies, there are differing degrees of willingness
to share the outcomes from the evaluations and the evaluations tend to be
underpinned by a particularly methodology, focusing on evaluating ‘economic
impact’. Accordingly, certain aspects of effectiveness (e.g. the development of
skills, the development and social capital in the form of relationships) and
stakeholder views are under-reported.
4.42
This economic perspective to evaluating the impact of business support has
led to calls for a more rounded stakeholder assessment of business support to
be introduced, particularly in terms of proactively engaging the range of
stakeholders involved in the delivery of business support services in the cocreation of evaluation methodologies (Gibb, 2002; Richard, 2009). The
involvement of small businesses as users of services is critical in the
development of evaluation methodologies.
Page 17
 Reflection 6:
Therefore, there will be value from extending the scope of the current mapping
of business and enterprise support to gain different stakeholder perspectives,
critically the views of different groups of small businesses, as to the value of
offerings within the current landscape and the foundation this provides for the
development of demand-led provision. Again, there may be opportunities to
undertake such work as part of the development of the Growth Hub as it would
provide in-depth intelligence as to how to engage different groupings of SME
with business support services.
5.
Summary
5.1
This summary paper has outlined the key features of the business and
enterprise support landscape in the North East region. In so doing, the paper
has raised a number of issues around the extent and nature of provision, key
overlaps and gaps and reflections on how to enhance the effectiveness of
current provision.
5.2
These key headlines are:
 The landscape consists of a range of organisations providing a diversity of
support offerings with layered inter-relationships and interdependencies
 There is a degree of complexity to the landscape. There are both
advantages and disadvantages to this complexity. On the one hand, the
complexity may reflect the diversity of needs of different groups of small
business across the North East region. On the other hand, this complexity
may reflect both inconsistencies and inefficiencies in provision, both in
terms of delivery structures and organisational boundaries
 There is an emphasis on working with start-up businesses and those
businesses with growth potential which results in working with
businesses in specific sectors. In turn, this poses a series of challenges for
other types of SME in accessing support
 There is a need for greater clarity in delivery of business and enterprise
support, in terms of the types of services provided at different
geographical levels and the roles performed by different types of
organisation
 There is a separation of business and enterprise learning and skills
development within the current landscape which is somewhat contrary to
what we know about the development of small businesses through the
development of the owner-manager
 There is a need for greater engagement with SMEs, as users of business
support, in the co-creation of business and enterprise support services.
This may provide a point of positioning for the Growth Hub, in that it can
signpost businesses to appropriate support services but also bring
forward proposals from businesses to co-create support to address
specific areas of need
Page 18

5.3
There are a number of challenges to unpacking the effectiveness of the
current business and enterprise support landscape, particularly given the
economic focus within evaluation approaches and methodologies.
The current business and enterprise support landscape in the North East
region raises a number of issues in terms of addressing gaps and overlaps and
identifying ways of enhancing the current effectiveness of provision. Key
reflections include
 Reflection 1:
The mapping suggests that there would be value from the development of
provision which assists businesses in: (i) managing the transition from start-up
to growth and (ii) developing an understanding of business resilience and/or
embedding resilience plans in the development of the business. The key outcome
from such provision would be to enhance the sustainability of early stage
businesses as well as building the number of businesses who would be prepared
for further development and growth.
 Reflection 2:
There is a need for provision within the North East LEP region which integrates
support for business and enterprise learning and skills development. The key
outcome would be to equip managers and leaders with the abilities and skills
required to survive and thrive within a business environment characterized by
uncertainty and ambiguity.
 Reflection 3:
There is a need for greater clarity in the type of services provided at different
geographical levels, by scoping what can effectively be delivered at a subregional, regional and national level in the North East region. The development
of the commissioning framework for European funding and Growth Hub provide
an opportunity to undertake this scoping exercise.
 Reflection 4:
The conclusions of the mapping exercise would suggest that there is a need to
explore how business support services can be offered to a wider range of
businesses, particularly those groupings of businesses under-represented in the
current landscape. This could be undertaken through the development of the
Growth Hub.
 Reflection 5:
In the development of the Growth Hub, there is an opportunity to proactively
engage with different groups of small businesses to identify demand-led
solutions to key business development needs and requirements and the ways in
which businesses can develop ownership of the development and delivery of
business support.
Page 19
 Reflection 6:
There is value to be derived from extending the scope of the current mapping of
business and enterprise support to gain different stakeholder perspectives,
critically the views of different groups of small businesses, as to the value of
offerings within the current landscape and the foundation this provides for the
development of demand-led provision. There may be opportunities to
undertake such work as part of the development of the Growth.
5.4
Given these reflections, the key recommendations for the LEP are to:
 Commission the development of provision which assists businesses in
managing the transition from start-up to growth and developing an
understanding of business resilience;
 Develop structures which integrates support for business and enterprise
learning and skills development;
 There is a need for greater clarity in the type of services provided at
different geographical levels, by: (i) scoping what can effectively be
delivered at a sub-regional, regional and national level and, (ii) reviewing
the existing evidence base (e.g. evaluations undertaken of current
provision in the region) and/or undertaking a focused piece of research
which maps the outcomes from this mapping onto the key needs and
requirements at each stage of the enterprise journey and (iii) clarifying the
roles to be performed by different groups of business support provider
through the European funding commissioning framework;
 Review how business support services can be offered to a wider range of
businesses, particularly those groupings of businesses under-represented
in the current landscape5, through the development of the Growth Hub
and reviewing practices from other regions in the UK where this has been
achieved;
 Facilitate the development of demand-led solutions to key business
development needs and requirements. This could be achieved through
either a call for proposals from groups of businesses for programmes of
support that address current and future needs and/or facilitating the
development of bottom-up networks between businesses which currently
face challenges in accessing mainstream business support;
 Extend the scope of the current mapping of business and enterprise
support to gain different stakeholder perspectives, critically the views of
different groups of small businesses, as to the value of offerings within the
current landscape and the foundation this provides for the development of
demand-led provision. This should form a key part of the development of
the Growth Hub.
These groups include: online retail businesses; micro knowledge intensive business services; micro
and small businesses in non-priority sectors (e.g. food and drink); small businesses looking to make
the transition from start-up to growth; micro-businesses looking to trade internationally; home-based
businesses.
5
Page 20
6.
References and Resources
The following references and resources have been used in the development of this
summary paper.
Anyadike-Danes, M., Bonner, K., Drews, C.C and Hart, M. (2013) Localisation of
Industrial Activity across England’s LEPs: 2008 and 2012, Enterprise Research Centre
Research Paper No. 15, Enterprise Research Centre, Birmingham.
Atherton, A. and Lyon, F. (2001) Segmenting Support for Small and Medium
Enterprises, Identifying and Disseminating Best Practice: Research Summary, The
Foundation for Small and Medium Enterprise Development, University of Durham.
Bennett, R.J. (2012) Government and Small Business, in Jones-Evans, D.J. and Carter,
S. (eds.) Enterprise and Small Business: Principles, Practice and Policy, Pearson
Education Limited, Harlow.
Bridge, S. (2010) Rethinking Enterprise Policy: Can Failure Trigger New
Understanding? Palgrave MacMillian, Basingstoke.
Council for Excellence in Management and Leadership (2002) Joining Entrepreneurs
in their World: Improving Entrepreneurship, Management and Leadership in UK SMEs,
Council for Excellence in Management and Leadership, London.
Department of Business Innovation and Skills (2014) Industrial Strategy: Government
and Industry in Partnership, Department of Business Innovation and Skills, London.
Gibb, A.A. (1997) Small Firms Training and Competitiveness: Building upon the Small
Business as a Learning Organisation, International Small Business Journal, 15, 3,
pp.13- 29.
Gibb, A. A. (2002) Creating Conducive Environments for Learning and
Entrepreneurship; Living with, dealing with, creating and enjoying uncertainty and
complexity, Industry and Higher Education, 16, 3, pp. 135-148.
Howat, C. and Zaidi, A. (2013) Qualitative Evaluation of Demand-led Skills Solutions:
Growth and Innovation Fund and Employer Investment Fund, Evidence Report 78,
UKCES, Wath-upon-Dearne.
Johnson, S. and Devins, D. (2008) Training and Workforce Development in SMEs:
Myth and Reality, SSDA Catalyst, Issue 7, pp. 1-18.
Lindlay, S., O’Neil, J., Kandeh, J., Lawson, N., Christian, R. and O’Neil, M. (2011) Climate
Change, Justice and Vulnerability, Joseph Rowntree Foundation, York.
North East Access to Finance (2014) North East Access to Finance Guide 2014, North
East Access to Finance, Newcastle upon Tyne.
Page 21
North East Local Enterprise Partnership (2014) More and Better Jobs: A Strategic
Economic Plan for the North East, North East Local Enterprise Partnership, Newcastle
upon Tyne.
Richard, D. (2008) Small Business and Government: The Richard Report, The
Conservative Party, London.
Small Firms Enterprise Development Initiative (2011) Labour Market Intelligence:
Business Enterprise, SFEDI, Newton Aycliffe.
Tully, J.M., Miles, N.J.O. and Hudson, R. (2005) Social Capital and Economic
Development in the North East: Promoting Economic Inclusion through CommunityBased Programmes and Projects, Centre for the Study of Cities and Regions, Durham
University.
Page 22
Appendix 1: List of organisations consulted
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Organisation
Arch
Business and Enterprise Group
Business Durham
Business and Innovation Centre
County Durham Enterprise Agency
Durham Creatives
Durham University
Escher Group
Gateshead Council
Ingeus
Newcastle City Council
Newcastle Science City
Newcastle University (x2)
Northumberland Business Services Ltd
Northumbria University
Project North East
Regional Technology Centre
Rural Growth Network
Sunderland City Council
Page 23
Appendix 2: The Enterprise Journey Source: Sear (2004)
Page 24

North East Business and Enterprise Support

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